Engr. Jose E.

Cayanan vs North Star International Travel, Inc

G.R. No. 172954 October 5, 2011

Facts: North Star International Travel Incorporated (North Star) is a corporation engaged in the travel agency
business while petitioner is the owner/general manager of JEAC International Management and Contractor
Services, a recruitment agency.

Virginia Balagtas, the General Manager of North Star, in accommodation and upon the instruction of its
client, petitioner herein, sent the amount of US$60,000 to View Sea Ventures Ltd., in Nigeria from her personal
account in Citibank Makati. On March 29, 1994, Virginia again sent US$40,000 to View Sea Ventures by telegraphic
transfer,[4] with US$15,000 coming from petitioner. Likewise, on various dates, North Star extended credit to
petitioner for the airplane tickets of his clients, with the total amount of such indebtedness under the credit
extensions eventually reaching P510,035.47.

To cover payment of the obligations, petitioner issued five checks to North Star. When presented for payment, the
checks in the amount of P1,500,000 and P35,000 were dishonored for insufficiency of funds while the other three
checks were dishonored because of a stop payment order from petitioner. North Star, through its counsel, wrote
petitioner informing him that the checks he issued had been dishonored. North Star demanded payment, but
petitioner failed to settle his obligations.

Hence, North Star instituted Criminal Case Nos. 166549-53 charging petitioner with violation of Batas
Pambansa Blg. 22, or the Bouncing Checks Law, before the Metropolitan Trial Court (MeTC) of Makati City. After
trial, the MeTC found petitioner guilty beyond reasonable doubt of violation of B.P. 22. On appeal, the Regional
Trial Court (RTC) acquitted petitioner of the criminal charges. The RTC also held that there is no basis for the
imposition of the civil liability on petitioner. The Court of Appeals reversed the ruling of the RTC and held
petitioner civilly liable for the value of the subject checks.

Issue: Whether or not the petitioner should be civilly liable to North Star for the value of the checks

Held: Affirmative. Petitioner argues that the CA erred in holding him civilly liable to North Star for the
value of the checks since North Star did not give any valuable consideration for the checks. He insists that the
US$85,000 sent to View Sea Ventures was not sent for the account of North Star but for the account of Virginia as
her investment. He points out that said amount was taken from Virginia’s personal dollar account in Citibank and
not from North Star’s corporate account.

Respondent North Star, for its part, counters that petitioner is liable for the value of the five subject
checks as they were issued for value. Respondent insists that petitioner owes North Star plus interest.

Upon issuance of a check, in the absence of evidence to the contrary, it is presumed that the same was
issued for valuable consideration which may consist either in some right, interest, profit or benefit accruing to the
party who makes the contract, or some forbearance, detriment, loss or some responsibility, to act, or labor, or
service given, suffered or undertaken by the other side. Under the Negotiable Instruments Law, it is presumed that
every party to an instrument acquires the same for a consideration or for value. As petitioner alleged that there
was no consideration for the issuance of the subject checks, it devolved upon him to present convincing evidence
to overthrow the presumption and prove that the checks were in fact issued without valuable consideration.
Sadly, however, petitioner has not presented any credible evidence to rebut the presumption, as well as North
Star’s assertion, that the checks were issued as payment for the US$85,000 petitioner owed.

Petitioner claims that North Star did not give any valuable consideration for the checks since the money
was taken from the personal dollar account of Virginia and not the corporate funds of North Star. The contention,
however, deserves scant consideration. The subject checks, bearing petitioner’s signature, speak for
themselves. The fact that petitioner himself specifically named North Star as the payee of the checks is an
admission of his liability to North Star and not to Virginia Balagtas, who as manager merely facilitated the transfer
of funds. Indeed, it is highly inconceivable that an experienced businessman like petitioner would issue various
checks in sizeable amounts to a payee if these are without consideration.